Playing Games


By Monish Chhabra ǀ 30th August 2016

In July, Dollar Shave Club – a company that sells razors for less than $1 on Amazon – was bought for $1 billion in cash by Unilever.

The company outsourced the manufacturing of blades to a supplier in Korea, and shipped them directly to the customers’ homes. In just 4 years, Dollar Shave Club captured 15% of the razor blade cartridge market in the US.

Innovation spares none; old or new, plain-vanilla or high-tech.

Pokémon Go launched with a bang. It unveiled ‘augmented reality’ like nothing before in the 50-year history of this technology.

The idea of blending virtual objects with the physical world, has uncountable applications. It can transform how we experience reality over the next few years, as both the hardware and software improve.

Another mundane but potentially transformational thing that is improving fast is – battery.

The cost of storing electricity would fall by 80-90% in the next 10 years. Once it reaches $100 per kilowatt-hour, it could trigger a revolution in how electricity is produced and consumed.

It would also make electric cars more affordable, which is critical towards their shift away from the combustion engine.

The Dutch government is debating a ban on selling any new petrol or diesel car in the Netherlands from 2025. The same date is planned for the same ban in Norway, where 1 in every 3 new cars sold is already electric.

Oil has more heart-break in store. By 2030, Lego bricks would no longer be made from oil-based plastics. The company is looking to develop a new material, likely bio-based plastic.

Air, water and sunshine – the basics are coming back in fashion. And we are getting better at harvesting them.

Desalination technology has made great breakthroughs. It has completely turned around the water situation in Israel.

Until just 10 years ago, this dry country used to struggle to find enough usable water. Today, more than half of the water used in Israel comes from desalination, and they have an excess of it.

While finance has its own excesses, one particular thing is really scarce today – yield.

Almost all Swiss government bonds are now yielding negative rates i.e. if you buy bonds, you pay interest.

Despite such low rates all around, credit demand is anaemic. Singapore’s consumer debt shrank for the first time in the last 10 years. The last time the consumers were so hesitant to take new debt was at the end of 2005.

Japan knows this all too well, but try one must. The central bank of Japan now owns 2/3rd of all domestic stock ETFs in Japan. In its bid to create 2% inflation, the central bank now owns 2% of the total Japanese stock market. And inflation - still missing.

Mind, Body & Soul

We are told our existence is on a smooth space-time continuum and the laws of physics are the same going forward or backward in time. Then why is that we remember the past, but not the future? – asks Gene Tracy, a theoretical physicist.

He posits that it is possible our experience of the ‘flow of time’ is like our experience of ‘colour’.

Colour does not really exist as a property inherent. Objects simply absorb or emit different wavelengths of light; which have no colour of their own. Only when a bit of those wavelengths enter our eyes, and our brain processes them to make some sense, ‘colour’ emerges.

Just like that, ‘time’ could also be an internal experience that our brain creates to make sense of the frantic world around us.

Both past and future exist simultaneously, but our brain creates the flow of time – as a narrative coherence - in order to be not lost, to find a direction.

If all the events from the past and future were jumbled up, they would be too random and overwhelming. Our brain needs a story in a sequence, to decipher the chaos and build a memory. A memory of the past is dynamically stable, whereas that of future is unstable.

Thus, the ‘future’ is not impossible to see, but extremely difficult to make sense of.

The Last Word

Pokémon Go has much in common with a central banker’s job today. Both are addictive, and both provide an incentive to be more active.

In the years to come, the former would likely succeed further in ‘augmenting’ reality, and the latter at ‘distorting’ it. That much future we can attempt to see and make sense of.

This write-up is for informational purpose only. It may contain inputs from other sources, but represents only the author’s views and opinions. It is not an offer or solicitation for any service or product. It should not be relied upon, used or construed as recommendation or advice. This report has been prepared in good faith. No representation is made as to the accuracy of the information it contains, nor any commitment to update it.